National Council for Voluntary Organisations

Sustainable Funding Project

AM 7

Trade offs? Achieving your mission in the consumer market Chair: Olof Williamson, Sustainable Funding Manager, NCVO

National Council for Voluntary Organisations

Sustainable Funding Project

Jonathan Stearn Director of Projects, Consumer Focus

National Council for Voluntary Organisations

Sustainable Funding Project

Véronique JochumResearch Manager, NCVO

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Civil society involvement in the market place for consumers in vulnerable positions: research findings

NCVO Sustainable Funding Conference 2012

28 November 2012

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Introduction

Objective of the projectTo map civil society involvement in the market place for consumers in vulnerable positions.

Scope of the projectFive consumer markets:• Insurance• Banking and credit services• Energy• Health equipment and products/mobility aids• Furniture/household appliances.

MethodologyDesk research based on the following sources:• Business databases• Trade journals• Trade associations/umbrella organisations• Research institutes• Organisational/corporate websites• Other institutions.

Useful definitions

Civil societyFor this study we are including charities, community groups, social enterprises, cooperatives, mutuals and all organisations that operate independently of the state and for public benefit.

Market placeWhere the sellers of a particular good or service can meet buyers of those goods and services

Consumers in vulnerable positionsPeople who cannot choose or access essential products and services which are suitable for their needs or cannot do so without disproportionate effort/cost/time.

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Civil society, the state and the market: blurring boundaries

Source: The UK Civil Society Almanac 2012

In recent years the boundaries between civil society, the state and the market have continued to blur, as reflected in the development of social enterprises and the mutualisation of public services. The diagram here highlights how different types of civil society organisations are positioned in relation to communities, the state and the market – some are closer to the market and the state than others.

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Generating income: the income spectrum

Donor Funder Purchaser Consumer

Gift economyIncludes philanthropic giving and voluntary donations. Provides unrestricted funding for organisations to use at their discretion to further their aim

Grant fundingUsually restricted funding provided to deliver outputs and/or mutually agreed outcomes

Structured marketPayment according to the terms set out in a contract between organisation and purchaser

Open marketSome types of trading are undertaken purely to generate profit; other types can also contribute to the delivery of an organisation’s mission. Income in this way is unrestricted

Asking Earning

Source: The Good Guide to Trading (NCVO)

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Generating income: voluntary sector income in 2009/10

Total income: £36.7bn Earned income: £20.1bnInvestment income

7% Voluntary income

39%

Earned income

55%

Individuals33%

Statutory sources54%

Voluntary sector

6%

Trading subsidiaries 3%

Private sector

4%

Source: The UK Civil Society Almanac 2012

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0

2,000

4,000

6,000

8,000

Generating income: earned income from individuals

£4,183

£4,442

£6,346

£5,238

£6,423

£6,098£5,674

£6,578 £6,565

Source: The UK Civil Society Almanac 2012

£ 5,394

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Civil society and the consumer market: a multitude of examples

Works towards better prices and working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world

Represents passengers using train services operated by Chiltern Railways , London Midland and Cross Country

Provides holiday accommodation

Provides an affordable and environmentally-friendly bus service for people without cars

Second-hand shops selling cloths, books, music and collectables

Provides information and guidance on veganism

Offers phone, broadband and mobile services

Campaigns for real ale, pubs and drinkers’ rights

Temporary shops selling cards

Grows and sells organic food

Community run village shop and post office

A micro hydroelectric scheme

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Civil society and the consumer market: examples relevant to consumers in vulnerable positions

Conducts research and publishes consumer reports for disabled and older people

Provides tailor-made equipment for the needs of people with disabilities

Provides furniture and electrical goods to the general public and people in need

Accreditation given by Age UK for products considered age-friendly

Campaign, run by an alliance of organisations, calling for warm homes and lower energy bills

Provide loans at very low rates of interest and helps people manage their finance

Tests, evaluates and sells for people with hearing loss

Partnership with EDF Energy to support customers during power cuts

Offers resources, tools and training to help people handle their money well

Provides affordable home contents insurance scheme for housing association tenants

Partnership with Barclays to develop an information booklet, specifically designed to help older people and their families

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Civil society and the consumer market: type of involvement

Research and development Testing and evaluation

Affinity partnerships

Accreditation and endorsements

Direct provision and supplyOther partnerships

Information, advice and support Awareness and education

Advocacy and representationCampaigning

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Civil society and the consumer market: rationale for involvement

Addressing market failure Responding to a gap in the market Improving quality of supply

Improving accessibility, inclusion and fairness

Meeting and responding to needs

Developing skills and providing employment

Providing alternative models of production and

distribution

Providing alternative models of ownership

Bringing about social change and tackling global

challenges

Generating income and diversifying income

streams

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Conclusions

• Many civil society organisations are involved in activities that relate to the market place for consumers in vulnerable positions, appealing to individuals as consumers but also as beneficiaries, supporters and activists.

• One of the most striking findings of this project is the diversity of involvement within the different sectors we looked at and amongst the organisational examples we identified.

• Within each sector we found examples of several involvement types, although some were more prominent than others. For instance, in the insurance sector affinity partnerships were particularly popular as were product accreditations and endorsements in the health equipment/mobility aids sector.

• Individual organisations were, in most cases, involved in more than one type of involvement offering a mix of activities, and had more than one reason for being involved.

• Many initiatives aimed to improve access and fairness - some did this by offering better value for money, others by ensuring that the needs of their beneficiaries are known and taken into account; and some combined both approaches.

• Being involved in multiple ways and for multiple reasons can be challenging if organisations are pulled in different directions and if rationales for involvement compete. It is particularly a challenge for larger organisations and could be, in the current context, increasingly difficult for organisations looking for alternative funding sources to statutory sources.

• An organisation’s values can provide an effective means of checking and challenging the appropriateness and effectiveness of the services and goods provided.

National Council for Voluntary Organisations

Sustainable Funding Project

requires subsidy makes money

on mission

off mission

Grant /donation funded

Primary trading

Non-primary tradingSubsidised activity

Majority activity Prime target

Proceed with cautionStay out!

National Council for Voluntary Organisations

Sustainable Funding Project

AM 7

Trade offs? Achieving your mission in the consumer market Chair: Olof Williamson, Sustainable Funding Manager, NCVO